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Terms in this set (56)

1. company hires IB to sell the company
2. IB does due diligence - investigates the company and its financials to see if there are any problems , gathers info for the sale process
3. IN values the company
4. IB drafts an offering memorandum - book about the company that will be read by potential bidders
5. IB and company put together a list of potential buyers - length of list is driven by a tradeoff between desire to maximize price (large number of bidders) vs. desire to maintain secrecy (smaller number of bidders)
6. distribute the offering memorandum to the potential buyers - buyers must sign a confidentiality agreement to receive it
7. collect expressions of interest from potential buyers - these are non-binding bids that provide the buyers preliminary thoughts about price and terms, will contain many contingencies (which gives bidder the ability to walk away)
8. select finalist companies - based on price, best terms, and odds of completing the deal
9. finalists do due diligence and submit final bids - price and method of payment, proof of financing, draft of purchase agreement (proposed details of the deal including contingencies) - buyers will often require additional contracts to keep key employees, customers and suppliers in place after the deal closes
10. winner is chosen - best price and terms
11. shareholders vote on deal - a merger proxy is sent to them to provide them with information about the proposed deal
12. government approval may be required
13. deal closes (ownership changes hands)